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But there's still a chance Vista will be delayed again

Microsoft announced that it will spend roughly $900 million in sales and marketing initiatives to drive Windows Vista, Office 2007. During its financial results call, Microsoft CFO Chris Liddell said that his company will be spending roughly $450 million to market the three key products and another $450 to develop its sales team.

According to the announcement, Microsoft received a solid number of renewals for long term licensing of its Windows and Office software products. This in turn, injected a good sum of long term revenue for the software giant. The extra revenue said reports, contribute to the decision to invest heavily in sales and marketing. Microsoft announced early on in Windows Vista's development that it would be the largest project the company ever undertook.

Microsoft Office is already well under way and is practically just waiting to be released but many analysts are looking to Windows Vista to kick start the 2007 year. Microsoft delayed Windows Vista several times over the course of the development process and despite its projected release date of Q1'07, Bill Gates hinted that the company would not hesitate to announce further delays if it meant that Microsoft would be able to further improve the OS.

Liddell said "the shift to annuity signals stronger customer demand for Office 2007. We had strong quarter for volume licensing. Renewals were on the high end of our range of 66 to 77 percent, there's growing customer demand for new products." Despite this, Liddell admitted that next quarter revenues won't be as strong because Microsoft is at the end of its major renewal cycle.

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Going to need it.
By GGA1759 on 7/24/2006 12:37:11 PM , Rating: 3
With all the past issues and upcoming issues with Vista, MS will need that $1 billion to convince many people why they should even think about investing in a new OS.

Or MS should just take that $1B and reinvest it into R&D.




RE: Going to need it.
By TomZ on 7/24/2006 12:45:59 PM , Rating: 3
quote:
With all the past issues and upcoming issues with Vista, MS will need that $1 billion to convince many people why they should even think about investing in a new OS.

You don't understanding marketing. The purpose of marketing is to get the word out, to get people to recognize the brand, etc. Their marketing effort has nothinkg to do with overcoming issues. Vista hasn't even been released yet - so by definition, there are no issues, and the future is left to be seen. In any case, if there are issues, those are fixed by patches, not marketing.
quote:
Or MS should just take that $1B and reinvest it into R&D.

You don't understand marketing (I guess I said that already). If you invest all your money in engineering, and zero in marketing, nobody will buy your products. If you don't believe me, start an engineering company and do lots of engineering and no marketing, and see how long you last.


RE: Going to need it.
By bldckstark on 7/24/2006 1:04:54 PM , Rating: 2
This has been going on for years now. They call it the "AMD" business model.


RE: Going to need it.
By Xavian on 7/24/2006 1:46:28 PM , Rating: 2
check and mate :P

Indeed AMD REALLY lacks any substantial form of marketing budget, yet they are surviving it seems.

Personally i think MS should scrap the whole NT kernel and create some form of Next Generation Windows Kernel (NGWK) from fresh with a new mindset in mind. Not trying to build upon the maze of code that is the NT kernel, sure its an advanced kernel, but it is the result of a decade of upgrading and modifying the kernel, its gotta be hell to improve upon nowadays.

Maybe Vienna will provide this, but i really dont know.


RE: Going to need it.
By Master Kenobi (blog) on 7/24/2006 1:54:37 PM , Rating: 2
They're working on it. The NT Kernel had about 33% of it rewritten from scratch just for Vista, it would be more likely that Vienna rewrites another 33% of it. Rather than gambling on a completely new kernel, just rewrite chunks of it with each OS release, that way you can minimze the amount of debugging you need to do.


RE: Going to need it.
By masher2 (blog) on 7/24/2006 1:56:18 PM , Rating: 2
> "Indeed AMD REALLY lacks any substantial form of marketing budget, yet they are surviving it seems."

According to AMD's 2005 financial report, they spent essentially as much on marketing and administration as they did on R&D.


RE: Going to need it.
By TomZ on 7/24/2006 2:09:50 PM , Rating: 2
quote:
According to AMD's 2005 financial report, they spent essentially as much on marketing and administration as they did on R&D.

Which, I would add, exceeds $1B/year. Out of that, some amount probably in the hundreds of millions of dollars, is for marketing. I would hardly consider that "no marketing."

AMD’s Marketing Push. AMD, meanwhile, has increased its marketing spending. The company lumps marketing expenses with other administrative costs, but that spending line increased by nearly 21 percent to $309.53 million in the second quarter from the first quarter this year. “We did a fair amount of investing in the future, particularly in the marketing area to power our way through the environment,” AMD Chief Financial Officer Bob Rivet said in a conference call to discuss recent earnings.
http://www.redherring.com/Article.aspx?a=17681&hed...


RE: Going to need it.
By xsilver on 7/24/2006 10:39:01 PM , Rating: 2
What kind of mass market media marketing do they do?
the only ones I can think of are the logos on the ferrari f1's and the logo's on the cyclists (was it just discovery team?)


RE: Going to need it.
By jtesoro on 7/25/2006 10:18:20 AM , Rating: 2
Instead of saying that they don't have much marketing, maybe we should say that they don't have very effective marketing.


RE: Going to need it.
By matthewcaudle on 7/25/2006 4:35:23 PM , Rating: 2
i see two amd billboards every day on my way to work.


RE: Going to need it.
By GGA1759 on 7/24/2006 2:45:48 PM , Rating: 3
Sarcasm escapes you, doesn't it?


RE: Going to need it.
By TomZ on 7/24/2006 3:14:31 PM , Rating: 2
quote:
Sarcasm escapes you, doesn't it?

Not usually, but apparently it did in your post. Sarcasm doesn't usually work well in written communication with strangers, except for in the minority of cases where it is obvious.


RE: Going to need it.
By GGA1759 on 7/24/2006 4:01:32 PM , Rating: 2
Obvious sarcasm isn't any fun.


RE: Going to need it.
By masher2 (blog) on 7/24/2006 4:56:20 PM , Rating: 3
> "Obvious sarcasm isn't any fun. "

Neither are smoked red herrings on a hot tin roof.

See...you're not the only one who enjoys making obscure statements that don't add to the conversation.


Chump Change
By jodhas on 7/24/2006 11:47:12 AM , Rating: 3
Chump Change.




International Advertising
By Hippiekiller on 7/24/2006 12:14:28 PM , Rating: 2
At first I considered this number to be horribly astronomical, but I was only considering my home country. When microsoft begins advertising in all 192 countried those costs likely mount fast.




RE: International Advertising
By umerok on 7/24/2006 12:38:58 PM , Rating: 1
The article says the $900 million includes XBOX 360 sales and marketing too.


THE REAL REASON!
By creathir on 7/24/06, Rating: 0
RE: THE REAL REASON!
By creathir on 7/24/06, Rating: 0
Still Wonder Why??
By Sceptor on 7/24/06, Rating: -1
RE: Still Wonder Why??
By masher2 (blog) on 7/24/2006 12:13:00 PM , Rating: 4
When you purchase a product you agree to pay the purchase price only. How the seller decides to spend that money is their business-- not yours.

It's a little thing called "freedom".


RE: Still Wonder Why??
By theteamaqua on 7/24/2006 4:54:18 PM , Rating: 2
yes they cvan pay 20+ billion for all i care,

i only care about the price i nee to pay for this, and is this relaly better than XP both in games, security, and GUI??


RE: Still Wonder Why??
By masher2 (blog) on 7/24/2006 4:57:26 PM , Rating: 2
Remember that most XP users won't upgrade right away, if ever. Vista will be primarily sold to the OEM market...at prices far below retail list.


RE: Still Wonder Why??
By MrPieGuy on 7/24/2006 12:25:16 PM , Rating: 1
Ya, somebody oughta sue McDonalds for that.
How MS wants to spend ITS money is ITS decision. YOu want the product you pay the extra dollar. Think about it, 1 billion dollars? How many people are going to buy this. I figure by the end, 1 billion just may get shipped out.


"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation











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